By Al Edwards, Financial EditorTHE Jamaica Stock Exchange (JSE) is taking a number of measures to further bolster the market's performance and is preparing to embrace the likelihood of a regional stock exchange.
The JSE has picked up the gauntlet of a regional stock exchange and is currently examining models with a view to ascertaining one that can be implemented into a Caribbean context. Speaking to the Financial Gleaner earlier this week, reappointed chairman of the JSE, Roy Johnson, said that last month he attended a regional capital markets committee meeting in Barbados to discuss models for a regional stock exchange.
"As regard to a regional stock exchange we really need some leadership. No one had sat down with all the stakeholders from the Caribbean Stock Market Association (CSMA) with clear terms of reference. What we are trying to establish is what kind of model should be employed."
Mr. Johnson said that it was very unlikely that the existing exchanges would ease questions and choose to concede to a regional body. It appears likely that a model currently employed in Europe where the various exchanges will continue but have portals into a single exchange may be the way. In 2000, Euronex was formed out of an amalgamation of sorts of Amsterdam, Paris and Brussels. The respective exchanges formed a holding company with each exchange maintaining its identity but having a portal into a single exchange.
Mr. Johnson outlined the challenges facing the formation of a regional exchange, notably, each jurisdiction applies its own regulations and so the Financial Services Commission (FSC) can only monitor the JSE. To date there is no definable Caribbean Court of Justice and it is yet to be determined what entity would be the final appellate court for legal disputes. Then there is the lack of a single currency making the settlement of trades even more arduous. As it now stands cross border trades are settled in U.S. dollars. However, a solution to exchange rate differentials is hardly insurmountable.
The Council of the Jamaica Stock Exchange (JSE) recently appointed Mr. Roy Johnson as executive chairman and Mrs. Marlene Street as general manager. Both appointments became effective June 1, 2004.
Mr. Johnson, who has been JSE chairman since June 2000, will be on secondment for a period of one year from his substantive post as vice-president for Investments at Victoria Mutual Building Society. Among his principal responsibilities will be overseeing the completion of the JSE's plan to transform itself from a not-for-profit, mutual company owned by its broker-members to a limited liability, publicly held company, a process referred to as demutualisation. Mr. Johnson will also direct the Stock Exchange's participation in the creation of a Caribbean Regional Stock Exchange and ensure the adoption of corporate governance policies and plans by the Stock Exchange and by all listed companies.
JSE FUTURE
So with both Mrs. Street and Mr. Johnson at the helm, what does the future hold for the JSE?
"We will be looking to strengthen the JSE to exploit opportunities and we can do so by demutualising that is the trend all over the world now. We will continue to push for good corporate governance . Between June 10-11, I will be attending a meeting in St. Kitts with various corporate governance groups. We will be seeking to publish our own corporate governance principles.
"We intend on establishing a fixed income depository. This will settle, clear and provide custody for fixed income securities. Trinidad has already put in place a Central Securities Depository and it is working well for them. A depository is important because one needs to interface with it to get the settlements done."
STREET'S ACHIEVEMENTS
Mrs. Marlene Street joined the Jamaica Stock Exchange as deputy general manager in September 2000 and was principally responsible for directing the Stock Exchange's financial operations, including maintaining and monitoring the organisation's annual budget; and for liaising with government agencies, financial institutions, listed companies and with the public. Mrs. Street was also appointed general manager and company secretary of the Jamaica Central Securities Depository in July 2003, with responsibility for managing the Exchange's Fixed Income Project.
Prior to joining the Stock Exchange, Mrs. Street was financial controller (1993-1997) and assistant general manager (1997-1999) at the Jamaica Observer.
As general manager, Mrs. Street will have overall responsibility for the management and operations of the Jamaica Stock Exchange.
Mrs. Street has a BSc in Management from the University of the West Indies and an MBA from Barry University.
Speaking to the Financial Gleaner earlier this week, Mrs. Street said: "The strategic direction the JSE will now take will be to increase the number of listings on the JSE. We will now create a greater public awareness of the benefits of listing. To that end we commissioned Market Research to ascertain from companies their thoughts on seeking a public listing. There was a feeling that it is a difficult process which at best is costly and that one had to contend with administrative bureaucracy. We will be initiating a campaign desirous of breaking down those barriers and informing companies as to financing via debt or equity."
